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. hade Sara ahScheh ban Sere enaChai GiorgioSaad Jeff freyMou urad
Fall013
Nowadays,differentbusinessesattempttocompeteondifferentgrounds,in ordertodoso;italldependsonwhichgroundthebusinessisbroughtup.Inall3 mainbusinessorganizationstandoutinthemodernworld,theformthebusinesses choosesisfundamentaltothewayitwilloperate,howitwillbetaxed,whatliability itsownershave;howexpenses,compensationandbenefitsaretreated;andthe problemsthatthebusinessownermayencounterifthebusinessfallsinto bankruptcy. Mostbusinessescanbestructuredinoneofthethreelegalstructures: I. SoleProprietors II. Partnerships III. Corporations Themaindifferencebetweenthe3typesofbusinessorganizationscanbesummed upintoeightmainfactors,thosefactorshelpusbetterunderstandhowthebusiness ismanagedandoperated,howtheownersinvestedtime,moneyandenergyinto buildingasustainableentity.Thefactorsarethefollowing: 1.Formationhowthebusinessisstarted 2.Managementhowitismanagedandoperatesonadailybasis 3.Ownershipwhoownsthebusinessspropertyandassets 4.Profithowthebusinesssprofitsandlossesaredistributed 5.Liabilitywhoisaccountableforthebusinessslegalresponsibilities 6.Taxationhowthebusinessistaxed 7.Stabilitythelengthofthebusinessslife 8.Terminationhowthebusinesscanbeterminated Tobetterunderstandthethreedifferenttypeoforganizationletusexaminehow eachformofbusinessworksandwhataretheadvantagesanddisadvantagesofeach one. TheSoleProprietorship:Thesimplestandmostabundanttypeofbusinessesfound aroundtheworld.ForexampleintheUSitaccountsforalmost73%ofallbusinesses found.Itusuallyisasmallfirmwithnotmorethen8employeesownedbyone person.Asoleproprietormayrunthebusinessdirectlyormayhireotherstorunit, butultimatelyitisthesoleproprietorsdecisionsthatdeterminethefirmsfate. Typically,asoleproprietorperformsmostofthemajorfunctionssuchasoverall manager,salesmanagerandfinancemanager.Sincetheproprietoristhesoleowner ofthebusiness,thereisgenerallynoneedforanyagreementsorformalities. Themajorityofsoleproprietorshipstodayoperateonarelativelysmallscale,where
thecapitalandcreditofonepersonisadequate.Therealcharacteristicfeatureofa soleproprietorshipisnotsize;itistheunlimitedandunsharedresponsibilityofthe soleowner. Themainadvantagesofasoleproprietorshiprelymainlyonitssimplicityand autonomybutalsoonthefactthattheowneristhesolegainerandpayssingletax andbenefitsalsofromshelterincome. Itsmaindisadvantagesarethatsinceitsonlyonemanrunningthebusinessithasa limitedsourceofresource.Alsothereisunlimitedandunsharedliability,ifthe companyfacesbankruptcy. PartnershipsWhentwoormorepeopleagreetocombinetheirresourcesandskills formutualprofit,theyhaveformedapartnership.Itisjustaboutassimpleasthat.: Eachpartnercontributesmoney,property,skills,labor,orgoodwillasthecapitalof thenewfirm.Thepartnersmustagreeonaseparationofownershipandprofits basedonthecomparativevalueofeachpartnersinputs. Twotypesofpartnershipcanbefound;ononehandwehavethegeneral partnershipwhereeachpartnerisfullyactiveinthefirmwithasayinits management.Eachisamediatoroftheotherpartner(orpartners)withfullrightto actforthefirm.Eachisfullyliableforthedebtsofthebusiness,andeachsharesin theprofits.Ontheotherhandwehavethelimitedpartnership,everylimited partnershiphasatleastonelimitedpartnerandonegeneralpartner.Thelimited partnerisnotlegallyliableforallthefinancialcommitmentsofthefirm.Instead,this partnersliabilityislimitedtotheamountofhisinvestingintheproject.Alimited partnerhasnoinfluenceinmanagement,noinvolvementinthedaytodayrunning ofthebusiness.Inessence,thelimitedpartnerislargelyaninvestorinthefirm. Themainadvantagesofapartnershiparethefactthatthepartnersgetalltheprofit andareexemptedfromtypesoftaxationthatcorporationface.Finally,as distinguishedwithsoleproprietorships,partnershipspermitamergingofcapitaland talentandasharingofriskforthegreatergoodoftheventure. Themaindisadvantageinpartnershipisfoundwhenthedeathofonepartner occurs;itwillautomaticallyendthepartnership.Thesecondmajorhandicaprelies ontheunlimitedpersonalliabilityapartnershipcanface.Businessdebtscangobble allofthebusinessassets.Ifthedebtscannotbereimbursedoutofthesepartnership assets,creditorscanattackthepersonalassetsofeverypartner. Corporations:ThebestwaytodescribeacorporationisbydoingjusticetoAmes AmeswhodescribedintheirworkPrivateCorporationshowcorporationscanbe
defined:"abody,createdbylaw,composedofindividualsunitedunderacommon name,themembersofwhichsucceedeachother,sothatthebodycontinuesthe samenotwithstandingthechangeofindividualswhocomposeit,andis,forcertain purposes,consideredasanaturalperson."Thereforeacorporationiscreatedbylaw, itisanintangibleartificialbeingandisviewedasanartificialpersonandissubjectto manyoftheopportunitiesandconstraints. Themaincharacteristicofacorporationisfoundinitslimitedliabilitytowardsits stockholders.Inotherwords,itsallowsinvestorsownpartofthebusinesswith limitingtheirlosses.Thecorporationitselfisresponsibleforitsactionandinnoway arethecreditorsentitledtoclaimthepersonalassetsofthestockholders. Corporationsalsodonotdependsononeperson,unlikethepartnership,the continuanceofexistencebythedeathoranyotherburdenitmayface.Another majorfactorincorporationisthefactthatcapitalcanbeincreasedatanytimeby increasingitscapitalstockforcash,orissuingstocksandbonds. Themainadvantagescanbefoundaspreviouslymentionedinthelimitedliability statusacorporationhastowardsitsinvestorsandinitscontinuityofexistence.It alsobenefitsfromdifferenttypesoftaxationthentheprevioustwobusiness organizationsdiscussed. Themaindisadvantageofacorporationisitsdoubletaxationlawondividendsthat aresharedbythecorporation,whichisverybotheringforcompanieswhoannounce dividendsonannualbasis.
SolarCo.LLP
ThenamespeaksforitselfbutSolarCoLLP.mainobjectiveistodevelopthe renewableenergysectorinLebanon.Thecompanywillbeapartnershipbetween fourowners,SarahSchehade,SerenaChaiban,GiorgioSaadandJeffreyMourad. Sincewewillbeeachinvestinganequalsumofmoneywewillallhaveanequal shareofinputonhowthecompanywillbemanaged.WechosetobeaLLPduetoits easeofcreationanditslowcostofoperationsanditslimitedliabilityprotection.Our mainproductofferingrangesfromhouseholdsolarpanelsforhotwater consumption,tocommercialsolarstripempoweringbillboards,trafficlights,radars oranyothermechanicalentitythatdoesnotrequireabigamountofenergy.The officewillbebasedinareaofDbayehduetoitslowrentalfees. 10/10/12Thegroupafterresearchingandadvicefromthelawyersdecided ontheformofbusinessorganizationandhiredthelawfirmforalllegal matters.Thelawyercharges$1500forthebusinessformation(expensed immediatelyasimmaterial).Paymentisduewithinoneweekoftheservices provided.Theannualfee,forlegaladvice,of$8000ispayableatthe beginningofeachfiscalyear.
A/R:1000$(DueDate15/11/2012)fromAsmarPowerPlus A/R:2500$(DueDate25/11/2012)fromAwadElectric A/R:1300$(DueDate30/11/2012)fromElectroPlus A/R:1200$(DueDate20/11/2012)fromCompuWorld A/R:860$(DueDate09/11/2012)fromAsmarPowerPlus A/R:1450$(DueDate12/12/2012)fromSinElFilMunicipality A/R:730$(DueDate26/10/2012)fromAsmarPowerPlus A/R:980$(DueDate26/10/2012)fromElBachaElectronics A/R:3000$(DueDate05/11/2012)fromElectroTonino A/R:4500$(DueDate05/12/2012)FromAwadElectric
30/10/2012SeveralA/Rwerecollected.
Paymentofaccountpayable:5000$ForGlobalTradingltd Paymentofaccountpayable:7500$SolarManEnterprises
Distributionofownersequity:13500$